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Portfolio > Asset Managers

SS&C Buys Advent Software for $2.7 Billion

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Advent Software (ADVS), the creator of the portfolio management platform Black Diamond, is being acquired by SS&C Technologies (SSNC) for some $2.7 billion, the two firms said late Monday. The deal was announced just hours after Fidelity said it was buying eMoney Advisor.

Advent has a base of roughly 4,300 clients, such as asset managers, hedge funds, fund administrators, prime brokers, family offices and wealth management advisory firms. The San Francisco-based firm had sales of close to $400 million in 2014, about 90% of which is recurring.

For its part Windsor, Connecticut-based SS&C has completed 40 acquisitions to date, including GlobeOp in 2012 and DST Global Solutions in 2014.

“We have been more successful in the [wealth management and advisory] segment via our history, which includes Black Diamond as our flagship offering, said Advent CEO Pete Hess, in an interview with ThinkAdvisor. “They are buying us to offer their capabilities to our customers, including those in the advisor space,” and vice versa.

Industry Play

The advisory space is the fastest-growing segment of the financial services industry, Hess points out.

“There are very few new hedge funds, banks or insurance firms or mutual fund companies. But firms are forming in the RIA space, where Advent is very well positioned to serve them,” the CEO said. SS&C “deliberately bought Advent, since we are in a part of the market where they haven’t played so much yet.”

Tech watchers say Advent is very advanced in what it is doing with cloud-based technology. But its portfolio reporting tools are equally, if not more, attractive.

“Advent’s approach to portfolio reporting is key to providing a mobile-digital experience for clients in the brokerage and traditional advisory space, which includes banks, trust firms and RIAs,” said William Trout, a senior analyst with the consulting group Celent, in an interview.

For SS&C, which has a strong foothold in the institutional asset management space, “This is a quantum leap in its digital asset capability in terms of the reporting and big data services it offers for client intelligence,” Trout explained.

“Clients want mobile access and to know where they are in terms of their financial goals,” he added. “They are swallowing them up to push forward into the wealth space.”

While some Advent clients use its Black Diamond software, not all of them do, but Hess says clients do not need to worry about the streamlining of its products any time soon.

“We are committed to whichever accounting system you are on, and at Advent, you will have industry-leading and mobile capacities going forward,” he stated. “It’s business as usual on the product strategy we have.”

As for more tech M&As, the CEO isn’t one to make predictions. “Ours is pretty unique case in that we have known each other for quite a while,” he explained

Still, Hess adds, “It’s a unique time. Deals require financing, and debt is still relatively inexpensive. It could be a good time to do such deals.”

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